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Gold Rush in China

By Lawrence Chan   on 2011 Feb 24 Thu 17:18:08

It is reported that in China, many banks and luxury boutiques in major cities are running out of physical gold as retail customers are rushing in to buy physical gold in large quantity.

Some smaller city gold dealers are forced to go to the major cities to buy at street price to meet the demand of their customers.

Buying 10 kilogram of gold is considered as “casual buyers” in the retail market.

That is something to think about.

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Comments
  • Anna Karenina  February 24, 2011 at 23:45:14

    does it mean the end of the gold bubble or just the beginning of the most intense run?

  • Lawrence Chan  February 25, 2011 at 07:35:07

    Well, the back drop is that people in China know that the government does not like heated speculation in housing where it can easily put a cap on the asset class anytime.

    For gold, you can always sneak it out of the country and sell it at fair price – talking about distrust of the government and the Chinese there obviously find a way.

  • Lawrence Chan  February 25, 2011 at 07:39:37

    If similar actions (even at a mild pace) is taken worldwide, there will be no physical gold to deliver as well.

    I am afraid if the practice spreads, all major governments will gang together to introduce tax on profit of gold at hefty rate – no difference from heavy taxation on interest collected from long term savings in some countries.

  • Anna Karenina  February 25, 2011 at 09:37:26

    It is really fascinating how something that has almost no actual value could have such an inflated value :) I think gold is the longest lasting bubble in existence :)

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